Plug the Schools’ Money Drain

What will it take to get the school board and Supt. Ruben Zacarias to address the lack of financial controls that allows possibly millions of dollars to drain out of the Los Angeles Unified School District, which routinely claims it does not have enough money? Report after report since 1993 cites the absence of critical controls over the district’s $6 billion in annual spending. Yet board members and district managers repeatedly have failed to confront the problem; this makes them accomplices in mismanagement.

Such a situation would not be tolerated in any other organization the size of the LAUSD. There are plenty of examples of problems:

* Auditors and accountants have been working for a year to reconstruct the accounts at Crenshaw High School because the school’s financial manager, who left last year, kept virtually no records for more than two years. Student funds apparently were co-mingled with the regular school accounts.

* Outlandish expense reports by an employee at Hollenbeck Middle School went undetected because the district lacks routine computerized monitoring.

* An audit of Marvin Avenue Elementary School showed school funds were used to build a video library of 1,500 cassettes, mostly aimed at adults, not kids. The school also purchased four big-screen TVs that have disappeared.

* A state audit last fall documented sloppy management of about $6 million in small checking accounts at individual schools, routinely used to make small purchases quickly.

Wajeeh Ersheid, the district’s internal audit director, claimed last week that he could save the district $30 million to $50 million with a larger, more independent auditing staff. “My gut feeling is that for every dollar, 20 cents is wasted or embezzled,” he said.

This observation alone demands immediate attention. But Ersheid’s criticism of top administrators and his alleged insensitivity toward the district’s largely Filipino auditing and accounting staff led instead to his swift suspension and to recommendations for his dismissal. Why can’t school officials move on the financial issues with as much purpose and speed as when they deal with a personnel problem?

Indeed, district officials admit there is merit in Ersheid’s fiscal analysis. And David Koch, the district’s new business czar, has hired a consultant to oversee the audit department until another review of operations is done. But Zacarias and the board need to follow up this time and implement systems with solid checks and balances. At the next election, board members will be measured on progress toward this goal.